5 reasons why cryptocurrency makes business sense

What makes Bitcoin and other cryptocurrencies different, and why should they be on your business’s radar in 2021? Easy Crypto CEO Janine Grainger sheds some light on the subject.

Bitcoin was the world’s first widely adopted cryptocurrency, designed to allow people to directly send money to anyone, anywhere. This type of transaction is known as “peer-to-peer”.
In other words, Bitcoin allows you to pay Alice or Bob directly, no matter where they are in the world. Neither you, Alice or Bob need to go through a third party, like a bank or Paypal, in order to process this transaction.

Since the birth of Bitcoin, we have seen enormous growth of the wider cryptocurrencies market, with more versatile technologies being introduced. There are now more than 7,700 different types of cryptocurrencies with a combined market capitalisation of NZ$814 billion*.
It’s clear that new and emerging forms of digital payments are here to stay and the method in which people pay for things is changing rapidly, especially in a post-covid economy.
Earlier this month, Paypal announced its cryptocurrency services to its users in the United States. This means that customers are now able to buy, sell and even save in cryptocurrencies with Paypal. With the payment giant now joining the space, this signals the potential cryptocurrencies play in shaping how we make transactions.
Closer to home, Centrapay, a New Zealand based payment solution provider, is able to help Kiwi SMEs in the adoption of cryptocurrencies. They provide merchant services solutions that link in to current POS terminals or online payment systems, and allow customers to pay with digital NZD or other cryptocurrencies. Centrapay grabbed headlines earlier this year when more than 2000 of Coca-Cola’s vending machines in New Zealand became capable of accepting payments using cryptocurrencies.

If you are wondering if accepting cryptocurrencies is the right fit for your business, the answer depends on your business’s needs. Here, we explain five reasons how New Zealand businesses and consumers can better connect, engage and pay with cryptocurrencies.

1. Accepting cryptocurrencies will save you money.
Over the years, New Zealand retailers and merchants have been paying a high percentage on merchant-related fees. Retail NZ’s 2019 Payment Survey revealed that retailers were paying 1.1 percent of the value of every transaction on a contactless debit card and 1.5 percent on credit cards to their banks. This was nearly twice as much as Australian retailers pay for debit and credit card services.
Based on average sales
volumes, this costs New Zealand retailers an estimated $13,000 per year more than their Australian counterparts.
However, there are cryptocurrency payment solutions (such as Centrapay) that allow Kiwis to transact using either cryptocurrencies or the NZD with no fees. That’s right. Fee-free merchant payments. No more sharing your hard-earned revenue with financial institutions.
Even in direct payment scenarios, the network fees charged using cryptocurrencies are much lower. On 16 October, a Bitcoin user moved 29,999 BTC worth US$194 million, while paying a marginal fee of $0.14. Imagine doing a transaction this big with your bank, and the fees you would be paying!

2. Transactions will process quickly.
It’s frustrating to wait for funds to become available in your bank account, and not being able to receive payments on weekends. Transactions using cryptocurrencies allow you to skip all that waiting time. In many cases, the transactions occur in real time or within a few minutes.
High transaction speeds is definitely beneficial, especially in today’s world of instant gratification. As soon as payment is received, you’re on your way to deliver the goods or services your customers have ordered. No customer likes to wait.

3. Crypto payments minimises fraud and chargebacks.
Businesses should also know that all transactions are final when you use cryptocurrencies. Blockchain technology allows participants of a cryptocurrency network to verify funds and makes it next-to-impossible to spend more than you own. As a result, there is no need to worry about disputes or chargebacks.

4. The currency works worldwide.
There are many benefits of adopting cryptocurrencies payments, given that cryptocurrencies are a form of an international currency. This can be helpful if your business exports goods and services, or purchases materials from other countries. Cryptocurrencies help you avoid the expensive foreign transaction fees or exchange rates, and for those who hope to avoid volatility, there is the option to use stablecoins – a class of cryptocurrencies that offers price stability (for example, pegged to the US dollar) and are backed by a reserve currency or asset.

5. You can acquire new customers and stand apart from other businesses.
Any merchant who accepts cryptocurrencies in New Zealand is likely to grab the attention of both mainstream and social media. Cryptocurrencies have some major following – more and more people are learning about it, and embracing it.
As your customers become familiar with, and begin to use, cryptocurrencies it is advantageous for your business to ride this trend. While this may still be a niche market now, it won’t stay that way for long, especially with the New Zealand Government setting up its very own Future of Money unit while it prepares Kiwis for a possible cashless future.
Additionally, the trends in bigger markets such as the US and China allow us to catch a glimpse of what transacting with cryptocurrencies is like.
The more payment options you offer your customers, the better. Not only will you attract a wider customer base and more shoppers, evidence shows that the offering of more payment options increases the chances of customers following through with their intended purchases. This is a great strategy in increasing your revenue.
Furthermore, when it comes to retaining corporate asset value, we are now seeing a large number of institutional investors who are opting for Bitcoin as their corporate reserve. Square, for example, converted one percent of their balance sheet into Bitcoin, approximately US$50 million. And probably the headline that dominated 2020 is Microstrategy’s (a software company) big move of converting US$425 million of their reserve into Bitcoin.

At Easy Crypto, we are seeing an increasing trend in New Zealand businesses wanting to convert some of their liquid assets into cryptocurrencies,
The bottom line is that, in most cases, Kiwi businesses can benefit from accepting cryptocurrency. Of course, there are pros and cons, but the process to set up a crypto payment solution is relatively simple. If you want to keep your business competitive, or attract new customers, embracing cryptocurrencies payments may just be one of those strategies. n

Easy Crypto is a cryptocurrency retailer based in Omokoroa. Being fed up with how difficult it was to purchase cryptocurrency in New Zealand, brother and sister duo Alan and Janine Grainger started Easy Crypto to offer Kiwis a hassle-free experience when buying and learning about cryptocurrency. To learn more about cryptocurrency visit www.easycrypto.ai

*Source: https://coinmarketcap.com/